Iranian Oil Minister Rostam Qasemi sought to downplay a European Union embargo on country’s oil that came into effect on Sunday, insisting Tehran has stored up imports and hard currency for a “battle” against “dastardly” Western sanctions.
Iranian Vice President Mohammad Reza Rahimi announced the Islamic Republic has stockpiled the population’s daily needs to reduce the impact of the embargo hitting the oil and banking sectors.
“Today, we are facing the heaviest of sanctions and we ask people to help officials in this battle,” Rahimi was quoted by state television’s website as saying at a religious conference adding that the “dastardly sanctions” might cause “occasional confusion” in the market, but that the Iranian nation would not be stopped.
The EU embargo comes into effect today (Sunday) which orders a termination of all contracts for importing Iranian oil. The punitive sanctions also direct European companies not to be involved in insuring Iranian oil.
Oil market observer bodies and analysts say the embargo, coupled with US financial sanctions ramped up on Thursday, are denting Iran’s vital oil exports, which account for half of government revenues.
“The sanctions have had no effect on Iran and will have none,” Qasemi was quoted as saying by the ISNA news agency on Sunday.
“I do not see a problem in our enemies starting the sanctions as of today (Sunday), since these sanctions have existed for many years and nothing has happened and one should not anticipate anything new,” another state broadcaster IRIB quoted the oil minister as saying.
Qasemi and other officials admitted the “illogical” embargo had reduced exports to EU nations, but they said other nations had stepped forward to buy the oil.
“While we collectively exported 18% of our oil to them before, it is not difficult to substitute customers for this much oil in the world,” Qasemi said.
The IEA and energy experts believe most of the tankers remain anchored off Iran and are being used to store up to 42 million barrels of oil unable to be exported.
Before the embargo, Europe bought some 600,000 bpd from Iran, which sent two-thirds of its exports to China, India, Japan and South Korea.
The United States has granted exemptions to those Asian countries from its new sanction imposed on Thursday that targets foreign companies doing business with Iran.
That move averted a potential diplomatic row with China, Iran’s biggest oil customer, which greatly increased Iran crude purchases last month after a sharp dip earlier this year because of a commercial dispute with Iran. Beijing refuses to go along with the Western sanctions.